RBM lauds MSE automated system

Reserve Bank of Malawi (RBM) has hinted that the automation of the stock market set to roll out next February will enhance confidence for both local and international investors in the Malawi Stock Exchange (MSE).

Speaking in an interview with Business News last week RBM governor Dalitso Kabambe said the investment will competitively benchmark the stock exchange to its peers in the region.

“As a regulator, we have teamed up with the World Bank and the Ministry of Finance to upgrade and automate the MSE trading system infrastructure for effective and efficient transactions.

“We are bringing in the state-of-the-art technology, the Automated Trading System [ATS] and Centralised Securities Depository [CSD] System,” he said.

Kabambe encouraged potential issuers to join the market by issuing shares and bonds as it will also help in marketing their businesses on the international market.

“I urge businesses in the country to take advantage of this development and list on the Malawi Stock Exchange. In the same vein, let me urge the public to positively look at the Malawi Stock Exchange as an alternative and viable investment opportunity,” he said.

MSE chief executive officer John Kamanga in an earlier interview with Business News said the new system brings a number of advantages in terms of ease of trading as compared to the traditional way of trading.

“The system will make price discovery easier and it will also reduce systematic risks since there will be no paper handling. There will be efficiency as it will be the machine doing the matching,” he said.

The MSE was inaugurated in March 1995 and opened for business for the first time on November 11 1996, under the support of the RBM, with 2 300 Malawian citizens buying shares in the first company to be listed, the National Insurance Company now trading as Nico Holdings Limited.

Elsewhere in Africa, in countries like Kenya, Uganda, Botswana, South Africa and Tanzania, the automated trading system has saved brokers time, reduced systematic risks and enhanced price discovery as it enables brokers to conduct their business from various locations by accessing the stock exchange through the internet.

For instance, in Kenya, the system which was installed 2006 is linked to the brokers’ banks office system, the central banks system for treasury bonds trading and the central depository system which stores all shares in electronic accounts.

The system matches trade orders automatically and ensures that are concluded on the basis of first come, first save.  n